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The Geography of Money by Benjamin J. Cohen: A Comprehensive Review
Rethinking the Global Role of Currency in a Borderless Economy
The Geography of Money by Benjamin J. Cohen is a groundbreaking examination of how currency systems transcend national boundaries in the age of globalization. This review explores Cohen’s compelling arguments on the erosion of monetary sovereignty, the rise of currency competition, and how geopolitical and economic power are reshaped by fluid money networks across the globe.
Challenging Traditional Views on Money
Cohen begins by deconstructing the long-standing belief that currencies belong solely to their issuing nations—such as the dollar to the U.S. or the yen to Japan. Instead, he argues that modern monetary geography is defined by mobility, overlap, and competition, where currencies operate across borders, influence foreign markets, and participate in global finance without regard to physical territory.
This shift challenges policymakers and economists to adopt a post-territorial perspective on money—one that recognizes its cross-border functions and symbolic political power.
Globalization of Currency and the Rise of Monetary Networks
Currencies Without Borders
Cohen emphasizes that currencies like the U.S. dollar and euro have become global media of exchange, functioning far beyond their home countries. This cross-border use:
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Enables trade and investment between countries with weaker currencies
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Erodes the monopoly power of central banks over monetary policy
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Creates competitive currency ecosystems where global trust and utility matter more than national origin
The Competitive Currency System
Rather than a single dominant currency system, Cohen envisions a multi-currency competition model, where states, regions, and economic blocs offer currencies that vie for international usage. This introduces:
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Hierarchy of currencies (major vs. minor)
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Asymmetric power dynamics based on currency reach
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Increased volatility due to overlapping jurisdictions
Implications for Political and Financial Power
Shifting Sovereignty in the Global Economy
The wide use of foreign currencies dilutes a country’s ability to control:
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Domestic monetary policy
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Inflation and interest rates
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Exchange rate stability
Cohen argues that the sovereignty of money—once a hallmark of national independence—is now conditional, depending on external market forces and international trust.
Power Reconfiguration
Global monetary flows mean:
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States with globally accepted currencies gain economic influence
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Small or emerging markets lose autonomy to external monetary shocks
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New governance frameworks are needed to address transnational monetary externalities
Applying Network Theory to Money
Mapping Monetary Flows
Using network theory, Cohen conceptualizes global currencies as interconnected nodes in a sprawling web of:
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Central banks
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Trading systems
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Multinational corporations
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Private actors
This theory helps explain:
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How crises spread from one market to another
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Why regional blocs (e.g., Eurozone) gain collective strength
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How monetary influence travels without political alignment
Currency Hierarchy and Monetary Sovereignty
The Erosion of Exclusive Monetary Control
Cohen introduces the concept of currency hierarchies, where dominant currencies (like the USD or EUR) push aside local units in trade, pricing, and reserves. This results in:
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Partial dollarization of economies
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The rise of currency substitution
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Central banks needing to coordinate policies internationally
Monetary Sovereignty Redefined
In a global context, monetary sovereignty is no longer about complete control, but about managing exposure and leverage within global systems.
Critiquing Outdated Monetary Models
Cohen challenges the outdated notion that money operates purely within nation-state boundaries. His critique centers on:
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The rise of digital and private currencies
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Offshore banking and shadow finance
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Capital flows that ignore borders or regulations
This forces economists to:
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Reimagine policy beyond national frameworks
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Embrace multi-layered governance models
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Rethink how currencies achieve legitimacy and trust
Relevance in the Age of Digital and Decentralized Finance
Cohen’s ideas are increasingly relevant today, especially with:
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The growth of cryptocurrencies and central bank digital currencies (CBDCs)
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Shifts in global financial power toward Asia
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Global reserve diversification strategies
The book foreshadows a world where digital, stateless money becomes a core element of the financial system—and where monetary geography is no longer tied to physical space.
Conclusion
The Geography of Money by Benjamin J. Cohen is a seminal contribution to global monetary thought, offering deep insights into the interplay between geography, sovereignty, and currency systems. By challenging the territorial logic of traditional monetary models, Cohen presents a nuanced framework for understanding how currencies shape and are shaped by global power structures.
For economists, policymakers, and financial scholars, this book offers a lens to analyze the fluid, networked, and strategic nature of modern money. As we confront the rise of digital currencies, regional monetary blocs, and weakened national control, Cohen’s work remains more relevant than ever.
